Date post: | 08-Jun-2015 |
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Earnings Conference Call
2Q08
Not considering goodwill
amortization
Better mix led to a rise in net revenues by 14.5% quarter-on-quarter and 10.3% year-on-year - due to higher refractory sales in the domestic market and to
the steel industry.
Better mix led to a rise in net revenues by 14.5% quarter-on-quarter and 10.3% year-on-year - due to higher refractory sales in the domestic market and to
the steel industry.
Recovery of the gross margin and EBITDA margin reflect management´scontinuous focus on cost and expense
control.
Recovery of the gross margin and EBITDA margin reflect management´scontinuous focus on cost and expense
control.
Tax benefit resulting from mergers in 2008:
Magnesita Refratários S.A.: 1Q08 partial and 2Q08 fully appropriated; Subsidiaries: partial, starting
May 1, 2008.
Tax benefit resulting from mergers in 2008:
Magnesita Refratários S.A.: 1Q08 partial and 2Q08 fully appropriated; Subsidiaries: partial, starting
May 1, 2008.
Non-operating revenue of R$ 54.2 million from the sale of non-core assets
Non-operating revenue of R$ 54.2 million from the sale of non-core assets
Quarterly Net Income R$ million
Sales Volume Breakdown1H07
Sales Volume Breakdown1H07
Sales Volume Breakdown1H08
Sales Volume Breakdown1H08
(*) not including the non-recurring sale of 210,000 metric tons of magnesium silicate
194 kt
96 kt
39 kt 205 kt
82 kt
32 kt
Other minerals
1H08 vs. 1H07 = -14.4%
Total
1H08 vs. 1H07 = -3.0%
Refractories
1H08 vs. 1H07 = + 5.7%
329 kt 320 kt
229254 247 261 276
49
58 5962 42
2Q082Q07 3Q07 4Q07 1Q08
Exports
Domestic
318306 323
278312
Net Revenues
Net Revenues - R$ millionNet Revenues - R$ million Net Revenues by Product – %Net Revenues by Product – %
Higher demand from steel industryin Brazil led to a rise in sales.
78% 79%
3%5%
13%
4%4%
14%
R$ 580 MM R$ 638 MM
Services
Refractory
SinterOther minerals
Obs.: excludes non-recurring income from sale of 210 kt of magnesium silicate amounting to R$2.5 MM.
DM2Q07 -> 2Q08+R$47MM (21%)
Breakdown of RefractoryRevenues – 1H08
Breakdown of RefractoryRevenues – 1H08
Breakdown of Refractory Revenues to the Steel Industry – 1H08
Breakdown of Refractory Revenues to the Steel Industry – 1H08
(R$387 MM)
(R$35 MM)
(R$81 MM)
217.7
EBITDA – R$ millionEBITDA – R$ million EBITDA Margin – %EBITDA Margin – %
6
1Q
2Q
3Q
4Q
+71%
188.5
EBITDA / EBITDA Margin
Raw Materials
32%
Labor
28%Fuel
12%
Depreciation
6%
Industrial
Maintenance
4%
Energy
5%
Others
accounts
13%
COGS – 1H08COGS – 1H08 Operating ExpensesOperating Expenses
2Q082Q07 3Q07 4Q07 1Q08
Administrative
Sales
6664
75
5260
Costs
2008 administrative expenses increased because of non-recurring costs of mergers and restructuring of the Group’s companies.
Year to date, costs have amounted to R$12.6 million.
Net Debt/EBITDA – R$ millionNet Debt/EBITDA – R$ million
Obs.: 06.30.08 – annualized EBITDA was considered
Debt
The Company’s debt, which is composed by approximately 90%
long-term, excluding cash and cash equivalent of R$ 542 million is
equivalent to 1.4 timeannualized EBITDA.
The Company’s debt, which is composed by approximately 90%
long-term, excluding cash and cash equivalent of R$ 542 million is
equivalent to 1.4 timeannualized EBITDA.
Stock Performance
MAGG3 + 93.7%Ibovespa + 2.6%
Average daily trading volume: R$ 11.9 million
Outlook
SteelStrong signals for sustained growth, with confirmation of several expansion projects. Brazil has been consolidating as investment target and Magnesita is capable to respond to the needs of refractory products in this market.
SteelStrong signals for sustained growth, with confirmation of several expansion projects. Brazil has been consolidating as investment target and Magnesita is capable to respond to the needs of refractory products in this market.
Commodities• Booming demand mainly due to growing global economy, level of urbanization and industrialization in emerging markets.• Prices pressured by: energy, devaluation of the US currency, labor and inputs supply shortages, environmental concerns and export-barriers.• Production capacity is not sufficient (obsolete equipment, interruptions due to debottlenecking, longer lead times to build new production capacity.Consequence: Unbalanced supply and demand
Commodities• Booming demand mainly due to growing global economy, level of urbanization and industrialization in emerging markets.• Prices pressured by: energy, devaluation of the US currency, labor and inputs supply shortages, environmental concerns and export-barriers.• Production capacity is not sufficient (obsolete equipment, interruptions due to debottlenecking, longer lead times to build new production capacity.Consequence: Unbalanced supply and demand
Brumado Plant• Natural shield against pressures of magnesite sinter prices. Studies underway for expansion to supply both domestic and exports markets.
Brumado Plant• Natural shield against pressures of magnesite sinter prices. Studies underway for expansion to supply both domestic and exports markets.
CementMarket will remain heated due to higher credit availability.
CementMarket will remain heated due to higher credit availability.